Debt consolidation remortgage with an active debt management plan

The clients and their goal

Two applicants with an active debt management plan (DMP) and high levels of personal debt wanted to remortgage their home and consolidate their unsecured debts onto the mortgage.

The challenge

Mainstream lenders generally do not like an active DMP, particularly alongside a high level of debt compared with income.

Only one applicant was employed; the other’s income came from benefits, which not every lender will take into account. The DMP was also going to remain in place after completion.

How we approached it

Dave recommended a specialist lender. The interest rate was higher than on the high street, but the lender was comfortable with the active DMP and the household’s income, and Dave was satisfied the new loan was affordable.

The outcome

£199,500 over 25 years, fixed for two years. The mortgage offer came through in 19 days, and the legal work took a further six weeks. The remortgage completed in September 2026.

The plan for better rates

The two-year fix gives the clients time to improve their position before they review. Dave’s advice was not to take out any new credit agreements. If the DMP continues to be well maintained, there should be better options in two years’ time.

A small number of high street lenders will consider an active, well-maintained DMP when the rest of the application is strong, so a route back to mainstream lending may open up.

Before you consolidate debt

Moving unsecured debts into your mortgage can lower your monthly outgoings, but it is not right for everyone. Spreading short-term debt over a long mortgage term can mean paying more interest overall, and the debts become secured on your home. If you are struggling with debt, you can get free, impartial advice from MoneyHelper.

About this case study

Written up from the case notes of Dave Marcer, Mortgage Adviser at our Needham Market office. For more on this type of mortgage, read our guide to mortgages with a debt management plan.

This case study is based on a real client and is shared with their permission. Names and identifying details have been removed. Every case is different, and what is possible for you will depend on your circumstances. Lender criteria change over time.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.